LPL Financial Holdings Inc. (LPLA) Earnings Call Transcript & Summary

Good morning, and thank you for joining us. My name is Jim Putnam, and I'm the Chair of the Board of Directors of LPL Financial Holdings Inc. It is my pleasure to welcome you to our 2021 Annual Meeting of Stockholders and to call the meeting to order. As you know, we are once again hosting the meeting virtually in light of public health and safety precautions related to COVID-19. As we look forward to the end of the pandemic, I wanted to start the meeting by thanking our company's financial advisers who continue to provide much-needed financial advice in these extraordinary times to millions of Americans, while also adjusting their own practices to the changes brought on by the current environment. I also wanted to thank our company's employees for their continued hard work and focused commitment to LPL's mission of taking care of our advisers so they can take care of their clients. And finally, I'd like to thank our stockholders for their support during this period. As Dan Arnold, my fellow Director and the company's CEO, reported on last week's earnings call, our company delivered solid results in the first quarter of 2021 while continuing to make progress on its strategic plan. Turning to participants in the meeting. I will serve as Chair; and Michelle Oroschakoff, our Chief Legal Officer, will serve as Secretary. Each of the Director nominees is -- each of our Director nominees is participating virtually, as is Chris Herrmann from Deloitte & Touche, the company's independent registered public accounting firm. As is our custom, we will conduct the business portion of the meeting first and then answer questions at the end of the meeting. Matt Audette, the company's Chief Financial Officer, will also be available to answer questions. I would now ask Michelle to provide the company's Secretary's Report and explain our voting and other procedures.

Thank you, Jim. Copies of the agenda and rules of procedure for the meeting are available on the web portal. We will follow them closely so that we can conduct this meeting as efficiently as possible. As Jim mentioned, after the formal meeting has been adjourned, we will provide time for appropriate questions submitted by stockholders through the web portal. This annual meeting is being held pursuant to proper notice. We have received an affidavit from Broadridge Financial Solutions attesting to the mailing of proxy materials on March 22, 2021, to stockholders of record as of March 8, 2021. The affidavit will be followed -- filed with the minutes of this meeting. American Election Services, Inc. has been appointed as inspector of elections. Jim Raitt, a representative of that firm, is participating today virtually and has taken the oath of inspector of elections. Most stockholders have already voted by proxy, and those proxy votes have been tallied. We are informed by the inspector of elections that proxies representing more than 92% of the 79,900,338 shares of the company's outstanding stock eligible to vote have been received, and therefore, a quorum is present. Any stockholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Stockholders who executed proxies or voted online or by phone do not need to take any further action. Voting at this meeting will revoke any earlier proxy that you gave.

Thanks, Michelle. I would now ask you to review the matters to be voted on today, as described in the proxy statement.

The first item of business coming before the meeting is the election of Directors. The following 9 individuals, all of whom are in attendance virtually, have been properly nominated by the Board to serve as Directors until the 2022 Annual Meeting of Stockholders: Dan Arnold, Edward Bernard, Paulett Eberhart, William Glavin, Jr., Allison Mnookin, Anne Mulcahy, James Putnam, Richard Schifter and Corey Thomas. The second item of business is ratification of the appointment of Deloitte & Touche LLP by the Audit Committee of the Board as the company's independent registered public accounting firm for the fiscal year ending December 31, 2021. The third item of business is an advisory vote to approve the compensation paid to the company's named executive officers. The fourth item of business is approval of the LPL Financial Holdings Inc. 2021 Omnibus Equity Incentive Plan. The fifth and final item of business is approval of the LPL Financial Holdings Inc. 2021 Employee Stock Purchase Plan. As Jim mentioned, each of these proposals is discussed in the company's proxy statement, and the Board recommended election of each nominee as a Director and approval of each of proposals 2, 3, 4 and 5. The polls are now open. Any stockholder who hasn't yet voted or wishes to change their vote may do so now. [Voting]

Now that everyone has had an opportunity to vote, the polls are now closed.

Thank you, Michelle. And Jim, please provide us with the preliminary voting results.

Proposal #1 is the election of directors. In an uncontested election, a Director nominee will be elected if the number of votes cast for the nominee exceeds the number of votes cast against the nominee. Jim, please report the vote.

On Proposal #1, the number of votes properly cast for each nominee exceeds the number of votes cast against each such nominee.

Thank you, Jim. Each of the nominees has been duly elected. Proposal 2, ratification of the appointment of the company's independent auditors requires the affirmative vote of a majority of the votes cast affirmatively or negatively in person or by proxy. Jim, please report the vote on this proposal.

Proposal #2 has received the affirmative vote of a majority of the votes cast on the proposal.

Thank you. Proposal #2 is approved. Proposal #3 is the approval, in an advisory vote, of the compensation paid to the company's named executive officers. Although the outcome of the vote is nonbinding, our Compensation Committee and Board value the views of our stockholders and will consider the outcome of the vote when determining future compensation arrangements for our named executive officers. Jim, please report the vote.

The Proposal #3 has received the affirmative vote representing more than 99% of the votes cast on this proposal.

Thank you, Jim. The outcome of the vote on the proposal is noted. Proposal #4 is the approval of the LPL Financial Holdings Inc. 2021 Omnibus Equity Incentive Plan. Approval requires the affirmative vote of a majority of the votes cast on the matter affirmatively or negatively in person or by proxy. Jim, please report the vote on this proposal.

Proposal #4 has received the affirmative vote of a majority of the votes cast on that proposal.

Thank you. Proposal #4 is approved. Proposal #5 is the approval of the LPL Financial Holdings Inc. 2021 Employee Stock Purchase Plan. Approval requires the affirmative vote of a majority of the votes cast on the matter affirmatively or negatively in person or by proxy. Jim, please report the vote.

Proposal #5 has received the affirmative vote of the majority of the votes cast on that, and that is the final proposal.

Thank you. A report from the inspector of elections with the results of these votes will be filed with the minute books of the company. In addition, we will report the results in the filing with the SEC on Form 8-K.

We have now completed the business of the meeting, and the formal portion of the meeting is adjourned. Next, we will open up for stockholder questions from the web portal. In the interest of time, we'd ask stockholders to submit no more than 2 questions.

Having received no questions, thank you very much for your attendance and continued interest in LPL Financial. Operator, please close the line.